Business

Amazon Takes on PayPal With Its Own Checkout Service

The next time you buy a pair of shoes online, you may have more choice than paying with your Visa or PayPal — you may also be able to pay using Amazon.

That's what Amazon is hoping, anyways. The retail giant announced Tuesday a new service called "Login and Pay with Amazon." The service, where enabled, will allow shoppers to check out at third-party retail websites by using the payment information they have stored on Amazon (think of it as Facebook Connect for shopping). It's designed to make checking out more streamlined and secure: Shoppers won't have to enter their payment information during checkout, and they won't have to store that information at an additional site.

Amazon's major advantage entering the market is size. The company claims to have 215 million active accounts, nearly 40% more than PayPal.

But Amazon has a serious disadvantage, too. Most retailers recognize Amazon as competition, and have no desire to promote their services or products. Just look at Walmart and Target, both of which stopped selling Kindles last year, citing competition with Amazon's main retail business. Furthermore, by using "Login and Pay with Amazon," retailers forfeit access to valuable customer data. Amazon says it will not share customers’ credit card information with retailers who use its service.

It appears that Amazon hasn't signed any major retailers to the platform yet. Only one partner, airplane wireless provider GoGo, was named in the announcement release. Update: In a followup email, an Amazon spokesperson said that furniture retailer Cymax.com is also a partner.

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